greg, brandon, todd and blair. 315 pounds, 6'9". >> how long did it take to reel it in? >> two hours and 45 minutes. >> how did it taste? >> delicious. >> where is ours? >> on the way. >> more in the after the show. ♪ >> announcer: this is a fox news channel special presentation. ♪ ♪ >> announcer: "countdown to catastrophe" live from the nation's capitol. neil cavuto. >> neil: welcome, everybody, from a beautiful and sunny washington, d.c., where they're just getting over the washington senators not advancing to the national league championship. i don't know what happened. i went to bed last night and looked like the nationals were going to make it. all of a sudden, they're not. they're not. that's over. on to something else that could make these folks here and you at home depressed. what is facing us post this

election? because contrary to all of this nonstop coverage of everything november six, something that is going to hit all of us hard on december 31. that is why we're here today. what is at stake today for each and every american today and what could all of that, at the stroke of midnight on january 1. all the bush tax rates, better than $100 billion worth of spending cuts. they all kick in at identically the same time. think about that, as we rifle through this. top rate on capital gain jumping to 20%. dividend taxed at regular income tax rates. child credit, essentially being slashed. return of the married tax penalty. so for everyone involved, everyone getting socked big-time. it could go on and on i'm going to mention this as you are going to see this throughout the show. to get an idea of how much is

at stake, who pays for this? i'm telling you, at the rate we stand, everybody will. every single american family will. anyone paying taxes or expecting to pay taxes will pay more in the new year. all the bush tax rate disappear. and unless congress does to coddle together even an extension and soon, it happens at the stroke of midnight january 1. some economists said this is simply going to cost the economy one full percentage point off the gdp. do the math. one full percentage point is roughly what we are growing right now so that could easily turn us back to a recession. you might be asking yourself, why aren't they talking about it? why aren't they coming up in the debate? stapleton wants to know the same thing. he has been crumpling all of this. he has sort of a worst case

scenario that could develop here, that isn't entirely unlikely scenario if they do nothing. spell it out, bit-by-bit. what do you see happening assuming there is no deal at all? >> assuming there is no deal, we're in a world of trouble for the american family. this is crisis or catastrophe. you know, government oftentimes doesn't work to resolve problems until they become crisis. waiting for a company in private sector to hit chapter 11 before refining the sales process. this has implication for every american family. we are talking about 90% of families in america paying higher taxes. talking about reduction in income of $3,500 per american family. talking about income loss of more than 6% after taxes. the largest single income loss since 194s. huge implications for all american families. politicians have to for once step up to the plate and act in a bipartisan manner to try to fix this.

the scary thing, neil, president obama over the last four years has shown absolutely zero ability to compromise on any financial or fiscal issue affecting the american people. >> neil: i don't know about you but i'm not about to give a medal to republicans for having handled this. they, too, have been thinking a deal will miraculous work in their favor. under the assumption that if romney is elected president, they take over the senate. that is a swing for the fences. you know, it might or might not happen. you might be able to leverage a better deal if you get election result like that. but why are we at this point when the markets, up to now, have been sensing that surely they won't take this to the brink, and are beginning to fear, gosh these guys just might. >> guest: markets hate uncertainty. that's what we have right now. uncernty. it's affecting consumer spending and all areas of the economy. businesses are paralyzed with fear over what is going to happen to their tax burden. it is going to cost more than 2 million jobs in this economy.

the imf last week, most economists said gdp growth will slow in the area of 1-2%. imf came out and said it could be colossal close to 4% drop in the gdp. there are monumental consequences to not addressing it. yet, we're siting on the collective butts and waiting until 11th hour to address this problem. it's got very, very bad implications. >> neil: what is remarkable if you talk about executing this, it's kabuki theat they're goes with this. we have chatted about this before. the idea they always take it to the brink. and they always do something to get it past the brink. normally an extension or scarlet o'hara we'll think about it tomorrow. do something tomorrow. at that point that clark gable leaves. >> right. >> neil: scarlet wonder what is the heck happened? i wonder if we're at that point.

>> guest: look at the history of last summer when they raised the debt ceiling. it didn't play out with standard & poor's which lowered america's credit rating. we hope it doesn't happen with fitch and moody's the other rating agencies. it affects the federal and state government. we could have default and start global recession. real implication of us not getting the fiscal house in order to affect people on global level. national and state level. >> neil: a very good points, all. very much. to put this in perspective, when you talk about a downgrade -- a lot of people say what prompts a ratings agency to say, all right, u.s., you will get downgraded? even if you get a deal, lousy deal or structured in a way that the agencies don't feel

you have gotten a good deal, not worth the paper it's printed on, they will downgrade you anyway. with the rating agencies have been saying is we are beginning to think the sust a joke. not targeting one party over the other or not blaming a guy in the building behind me. still at home, and we plan to stop by for cup of coffee before he heads to virginia. to prepare for the next debate on tuesday. i digress. one thing we know from the president is the fiscal cliff issue didn't come up. in the weekly address. the bail-out did. romney again referred to this, strongly more today than in the past. it's come up in the prior debate. so this is going to become an issue. i wish it were more of an issue. the cofounder of micro systems and libertarian at heart who in his heart doesn't like what he is seeing in washington

right now. scott, i have always thought the reason why corporate america hasn't opened the wallet to commit to spending more money, of all the sun certainty, is the uncertainty a given and remaining in the wallets will remain closed? >> guest: i think so. this is a really stark election for most business folks in terms of are we going to open up the private sector, reduce regulations, open taxes, simplify the tax code. make it easier to start or grow a business or make it easier for consumers to have money in their pockets to go spend or is the government going to become the dominant player? as we sweep toward 50% of the gdp and public sector, you know, businesses are stepping back and saying this is very different than the past.

>> neil: focus on tax side of this, scott. say all the bush tax rates -- because everyone thinks only those for upper income will expire. the way it's now, all the bush rates expire. some argue yeah, it's only temporary. but bottom line, it happens. what do you see happening? >> guest: a huge spike in gas prices or some other situation that takes money out of the consumer's hands. you will see the earnings fall and people getting laid off. gets you to a negative spiral that everyone is worried about. we have want to put money back in the hands of businesses so they invest higher and grow. you want to put money back in the hands of consumers. we don't a revenue problem. this is what we said in california, some of us, a small percentage of us. we don't have a re-knew problem. we have a spending problem. if you look, steady state that

15 to 18% of gdp in the public sector you can raise revenue and grow the business. as soon as you try to raise more revenue from the private sector than say 18%. the biggest statement those be we are going to limit the size of government to i wish it was 15%. give me 18% or 20% as opposed to the run-away government. as soon as you start taxing people you start killing the goose that laid the golden egg, everywhere. that's how the lower income as well as the higher income fol folks. that is what is going on. you get in stagnation, stall. we're about to stall the economy. >> neil: one of the arguments that is more commonly raised say barack obama re-elected scenario is that everyone take a chill pill. we have only want to raise taxes on the top rate from 35 to 39.6%. despite what republicans are

whining about, this is the white house view. it affects only 3% of small businesses. you point out, though, that the small businesses account for a heck of a lot hires. so smell that out. is it just the upper income that see the hype? >> guest: they're all upper income. business owner or what i call tin vessor or charitable side. somebody like me and there are lots of folks out there who are trying to figure out what to do. taking the money away from us and giving it to the government to spend on pork and buying boats and the rest of it and inefficient allocation of resources humely inefficient allocations. look at the stimulus, payoff to the unions. pork and for votes. what do folks do with the money? they either spend it, which drives gdp and creates jobs, or they invest it, which i am doing a ton of to create new companies and grow people, weigh in as investment.

we did it in colorado, not california. who would want to invest in california rights now? give it to charity. or put in a bank where the interest rates are lowered and money loaned to businesses. those are the four things you do to accumulate wealth. having the government do government spending to put a tax on all income and all assets in the u.s. dollars. because we're devaluing the dollar printing money or borrowing money we don't have. all of those things are inefficient and leave it to the people who accumulated and created wealth to go reinvest that in the economy is huge. right now, people are sitting on the sideline, because they just don't have the certainty of where we're headed and whether there is going to be a fro open, reasonably regulated public sector. plus, we have the government getting in to healthcare and

doing education and getting in insurance business and picking winners, like solyndra. you have the government basically interfering with the public sector and free market enterprise. i majored in economics at harvard. i don't understand why people don't hear milton friedman. >> neil: very well put. scott mcnealey. thank you. scott's point you don't need economics degree from harvard to figure out as bill clinton would say basic arithmetic. it's working against both party right now. it's working against americans right now. the way things are going, we're piling debt at $4 billion a day, every day, every day. think about that. to me if a party does anything at all, address the growing debt. we're having arguments about big bird and whether he's

surviving. they're planning a big bird sympathizing march to support pbs. mark levin says we're seriously plucked. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad

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>> neil: you know, who does big bird's p.r.? he is like eight-foot money-making machine. if the gdp of most of latin america and funded entirely by us and romney's comment in a debate he wants to stop public funding for pbs and by extension, big bird and his pals. it's going to trigger a rally on washington. at the white house, washington mall, they will be gathering hundreds and thousands of pbs supporters who are going to be november 3 in defense of

public support and broadcasting. the troops will rally for big bird. mark levin says that is for the birds. part and parcel for what is going on in washington. the one they call the great one. best-selling author, mark levin. what do you think of that? >> guest: take a step back here. the government that is supposed to be innocuous is ubiquitous. that is the problem. we want to grow the economy and politicians want to grow the government. here is the thing. you have can't separate the economic solution from political solutions here. give me a second on this. ve a president of the united states, majority leader in thenate senate. i'll get to the speaker in a second. the two men are incapable of fiscal responsibility. no budget, no self-control, no answers. committed sadist. republican speaker of the house that became speaker thanks to tea party movement and he is sold school. neo statist republican.

no leadership there. we need new people in all three positions. that's the start. economically, they had a great guest on now. and the answers are not complicated. difficult to implement but we know what the answers are. they start with the word called "capitalism." rather than trashing capitalism constantly, whether it's class warfare, profit, the rich, that or that, one industry or another we should be embracing it and unleashing it. all this talk about the bush tax cuts do you realize we have not had an income tax rate cut in ten years? in ten years. look at the tax cuts, what tax cuts? they're talk about taking a status quo, tax rate that exist today, increasing the higher rates on people who earn more money. millionaires and billionaires like dry cleaners, you know, mechanics and other people like that. when you and i both know

spending is so massive they will try back tax and tax 401(k)s and raise taxes on the middle class. what is the answer? the answer is controlling government. firm, spending, caps over -- >> neil: they can't. they can't mark. whether they do it now or not, whether they play the smoke and mirrors or not sex they don't and it's clear to you and others that they're not. what do you think happens? >> it's over. then it's over. the economy is going to collapse. peep think just because it's america we'll survive mishandling of the finances. we're not guaranteed economic prosperity in this country and we won't have it if it keeps up. >> neil: to that point, we are just getting this in to our news room.

this is an interview with reuters saying that he thinks the market could lose 5-7% correction if it looks like no deal is imminent or they're far apart. three of four months would have greater uncertainty a the market may test itself one more time. 10% fall at these levels would be close to 1,500 points. and it would be bad. we're back after this. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's anothereason more investors are saying... [ all ] i'm with scottrade.

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>> neil: welcome, everybody, from the white house. we're just hearing the first numbers today at potential failure of guy in that buil building.

or down the street in the capitol building coddling together a deal to get the bush tax rate settled once and for all and could be better than $100 billion worth of spending cuts from happening at the stroke of midnight on january 1. the man who runs black rock, the huge financial concern, estimating that it could single-handedly lop 10% off the stock market to roughly translate to 1,500-point selloff that would accelerate mightily as he says, the fears would build and compound themselves that washington cannot get its act together. that is a big fear. that is why we are here. that is why we're just across the street from the white house the president is there now and will be taking off for virginia later this afternoon. getting ready for his debate with mitt romney on tuesday at hofstra university, in new

york. this issue of the fiscal cliff will be coming up. we are going to rifle through the numbers. stats from hell to come to keep you aware of what is coming january 1 if they don't get the proverbial financial act together. that's why we're here. this is a big issue you're not hearing about. i am telling you, if you don't move fast to address them, not only is the market impact severe, it's severe for the average american families. millions will see the taxes go up. a lot. a lot of people will lose their job. conservative estimate puts it at 2 million. another conservative estimate on the economy is one full percentage point off the gdp. that would land us in a recession. that jim jordan of the fine state of ohio is the tip of the problem. good to have you? are you closer to an agreement? >> guest: i don't know that we are. i will tell you this, we in

the house of representatives passed legislation to extent all current tax rate so no tax rate to american people this year. we passed legislation to prevent the big cuts to national defense. the other bills with the united states senate and harry reid doing nothing with it and sitting there. that is where we stand. as you know and as you said it's all about who will be the next president of the united states. >> neil: i wonder -- i know it's easy to blame the president but the sequestration deal that you are just hating, you agreed to. it was your backup backbone that you couldn't come to a deal on spending cuts. hear me out. you all agree to it and now you realize you can see the whites of the armageddon eyes and say well, no, no, no. not us, not us. don't you think that is a bit disingenuous? >> guest: i will tell you

this, neil. it didn't agree to it. i think in hindsight as you look at the deal that the members did vote for, it wasn't a very good -- >> neil: your speaker did. majority did. >> guest: yeah. that's why we put legislation forward that says let's don't have the devastating cut for national defense. replace it with other cuts to the government. as i said yesterday, the only thing worse than cuts to the national defense are no cuts at all. debt ceiling agreement put together last summer just remember this, the day after it passed the market dropped 500 points. two days later we got downgraded. week later, the market dropped 1300 points. the super committee that was supposed to solve everything didn't get anything done, like many of us subjected to be the case. now if they just suspend the cuts that required to take place, the only thing the taxpayers will have gotten out of the deal is $2.4 trillion more in debt. make sure we cut spending.

we have to cut spending. tax increases don't go up. >> neil: i want to pick this point you up with senator rob johnson. it could be a problem for you guys, republicans. you back away from the sequestration cuts, defense or anywhere else. here is what i hear from the financial community. they might be all just clueless, selfish greedy sobs. you walk away from spending cuts of any sort. you are walking in to an abyss. >> i wouldn't walk away from spending cuts. >> neil: even defense spending cuts? >> guest: the house passed legislation to take defense spending off the table and cuts in other areas. redeuce rate of growth in spending in other areas. the blame calls on the president, sat